Following on from MCV's analysis of the distribution landscape, we spoke to Omar Braery, Marketing Manager at QV Software, for his thoughts.
Can you outline how the distribution market has changed in the last few years?
The distributor landscape has had a very interesting transition the past several years, going back to the GFC really and the impact that had on some of the players that were around at the time.
Having lost a few companies that were around back then, it really strengthened a few of the players who were able to pick up the pieces, resulting in three or four major distributors.
What has this meant for the distributors who stuck around?
Well, whilst we’ve always been more than a 'box moving distributor’ (in that we’ve always maintained a fully fledged sales and marketing team), most other distributors are now engaging a lot more in marketing and PR than in previous years.
Even if its not being handled internally, they're bringing agencies onboard.
This shift has meant that distributors are now operating on similar thinking model as publishers (on a much smaller scale of course) in their product positioning and marketing strategies. We’re now also seeing the birth of ’new local distributors’ emerge out of global publisher infrastructural changes resulting in downsizing their local operations.
What challenges, if any, does this new market present?
The new landscape doesn’t really pose ‘challenges’ as such because its always good to have healthy competition – it keeps us all sharp and on top of our game. There’s a great level of mutual respect amongst the industry.
There are definitely challenges facing the industry as a whole though, but they’re pertaining more to price parity and grey importing.
For years the exchange rate has meant that we in Australia have been charged a premium (this isn’t limited to games by the way). However on the back of the strength of the Australian dollar and as savvy as the local gaming community is when it comes to finding a bargain online, market forces are now dictating various price point drops (as we’ve seen with a number of AAA titles recently).
How do you think distributors need to respond to that?
Over time, while we educate and work with our overseas partners on finding the right margin mix, the market will correct itself.
This will be the most effective method of combating the other major issue of grey importing. Which, again, we’ve witnessed taking place by major retailers in recent times. It isn't necessarily a fear that day one numbers will take a hit, it's more the stock that's brought in beyond day one and the effect that has.
What is the single greatest attribute a distributor can have to stay strong in the changing market, and how has QV in particular tackled this?
With any fast moving industry like ours, its crucial that you constantly evolve and remain relevant. Its important to be open to new opportunities and diversification, whilst remaining true to your core business. There wouldn’t be one single attribute but more a mix of good business practice, diversifying within areas that compliment your overall portfolio and looking to achieve steady, sustainable growth.
How do you see the rise of digital distribution affecting the distributor sector in Australia moving forward?
Digital distribution definitely poses another potential threat to the ‘traditional distributor’, but it also presents a huge opportunity for those who will be ready for it.
We’ve always embraced industry change and this is no different. We’ll continue to evolve and place ourselves in a position to be competitive and embrace the shift having recently launched www.myguild.com.au on the back of Guild Wars 2’s highly anticipated August release.
As long as brick and mortar retail exist – and I believe there will always be a place for it in our market - there will be a need for distributors of boxed products. It’s all going to be about taking advantage of the arising opportunities and offering a point of difference.
The customers will be the ultimate beneficiaries of this healthy competition.
Thank you for your time.
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